Agenda and minutes

Chair to report.

The Chair advised the Committee of the rules and etiquette for online meetings.

The Corporate and Community Services officer confirmed the names of those Councillors present.

No apologies for absence were received.

Amendment to minute 78(a) as follows:

·         “Electric charging points were planned for carparks in Lynton, South Molton, Ilfracombe and Barnstaple.

·         These charging points would be available to all to use, which included Blue Badge holders.”

RESOLVED that the minutes of the meeting held on 7^th January 2021 (circulated previously) be approved as a correct record and signed by the Chair with amendment to minute 78(a) as follows: “Electric charging points were planned for car parks in Lynton, South Molton, Ilfracombe and Barnstaple.  Theses charging points would be available to all to use, which included Blue Badge holders”.

There were no items brought forward as a matter of urgency.

(Please telephone the Corporate and Community Services team to prepare a form for your signature before the meeting. Interests must be re-declared when the item is called, and Councillors must leave the room if necessary).

Council Luggar – Item 7 declared personal interest as a Member of Tawstock Parish Council.

Report by the Head of Resources to Strategy and Resources on 1^st February 2021 (attached), and

(a)  the Minute Extract of Strategy and Resources on 1^st February 2021 (to follow).

The Committee considered a report by the Head of Resources (circulated previously) regarding the Performance and Financial Management for Quarter 3 of 2020/21.

The Accountancy Services Manager highlighted the following:

·       The revenue budget for 2020/21 was approved at Council on 26 February 2020 at £13,380,000.

·       As at 31 December 2020, the latest forecast net expenditure is £13,352,000, which produced a forecast budget surplus of £28,000. (Quarter 2 was a forecast budget deficit of £136,000). This £164,000 movement to a surplus combines various surpluses and deficits across the revenue budget, these details were shown in Appendix A – Variations in the Revenue Budget.

·       The original budget for 2020/21 included a forecast to achieve £200,000 worth of salary vacancy savings.  The current position forecasts we would achieve £388,000.

·       There was much pressure on the 2020/21 budget due to the Covid-19 pandemic and the Council’s income streams had been greatly affected in the first three quarters of 2020/21 and expected to continue through the financial year.  Additional costs had been incurred by the council in provision of temporary accommodation, additional agency staff for waste and recycling and in supporting the local community.

·       Central government had announced and paid local authorities four tranches of support funding totalling £1,575,000 for North Devon.  NDC had also claimed £160,000 in respect of the job retention scheme and received £268,000 New Burdens grant for Small Business Grants and Retail, Hospitality and Leisure Grants. 

·       Central government had announced they would help support local authorities for lost income by paying 75% of any lost income after Councils incur the first 5% variance.  The expected lost income and additional costs have been factored into the above figures in Appendix A along with the anticipated government support.

·       The figures shown in Appendix A included a projection for the rest of 20/21 based on the current environment and the continuing COVID-19 impact on income streams and expenditure.

·       It was anticipated that there would be a reduction in both Council Tax and Business Rates income during 2020/21.  However, no reduction for income was being reported for 2020/21 year as the financial effect of any deficit on the Collection Fund income would not have an impact on NDC finances until the following three years.

·       “Appendix B – Movement in reserves and balances” detailed the movements to and from earmarked reserves in 2020/21.

·       Full details of the Strategic Contingency Reserve movements and commitments were attached as “Appendix C – Strategic Contingency Reserve”.

·       The 2020/21 to 2022/23 Capital Programme was detailed in “Appendix D – Capital Programme”.

·       Further variations of (£3,301,516) were proposed to the 2020/21 Capital Programme as detailed in paragraph 4.4.3.

·       Further variations of £1,872,135 were proposed to the 2021/22 Capital Programme as detailed in paragraph 4.4.4.

·       The revised Capital Programme for 2020/21 taking into account the budget variations above was £7,110,512.

·       The overall Capital Programme for 2020/21 to 2022/23 was £31,419,916 and is broken down as follows: 2020/21 £7,110,512; 

2021/22 £22,384,916; 2022/23 £1,924,488.

·       Once funds have been included in the Capital Programme the Constitution  ...  view the full minutes text for item 85.

Report by the Head of Resources to Strategy and Resources on 1^st February 2021 (attached), and

(a)  the Minute Extract of Strategy and Resources on 1^st February 2021 (to follow).

The Committee considered a report by the Head of Resources (circulated previously) regarding the review of Charges and Fees for 2021/22.

The Accountancy Services Manager highlighted the following:

·       This year the guidance was to increase some fees and charges by 2%, although some fees were set by statute and these would be set nationally.

·       It was recommended that Allotments (Appendix A), Cemetery fees (Appendix F), sports pitches (Appendix G), Pannier Market charges (Appendix H) and Bulky Collections (Appendix I) were increased by 2%.

·       Other variations to the 2% increase were Building Control (Appendix B), Trade Waste (Appendix C), Land Charges fees (Appendix D), Environmental Health fees (Appendix E), Garden waste charges (Appendix J) and pre-planning application fees (Appendix K). 

·       Building Control fees were subject to a 2% increase which was rounded to the nearest £1.

·       Trade Waste fees and services had been reviewed to provide ‘Holiday Home packages’ which offered greater flexibility to customers.

·       Garden waste green bin services would increase to £40 per annum. It was noted that the fees had not increased since the service was launched in 2017.

In response to questions from the Committee, the Head of Resources advised:

·       Many of the Pannier Market stall holders (rather than those occupying premises) could be eligible for financial assistance in the form of the discretionary grant schemes available from the Authority.

·       The 2% increase to the Pannier Market fees was in line with the other increases across the Authority. This was a 2% increase on the base figure, rather than on the temporarily reduced fee rate. The Chief Executive had reduced fees during 2020-2021 using Urgent Decision powers and could see to continue this in 2021-2022 if he wished.

·       The Future High Street funded project could examine methods of attracting further footfall to the Pannier Market and possibly restructuring of fees to encourage new business traders.

·       The Strategy and Resources Committee had approved the funding of a consultant to be employed to work on the Pannier Market project.

·       Once the Future High Street (FHS) project had progressed the Authority could explore the possibility of setting up a working group to work with the Pannier Market officers and/or this Committee being provided with regular updates on the FHS project.

·       The increased fees on the Garden Waste service would not cover the costs of running the service. To cover the costs fully the fee would be needed to be set at £45-£46pa.  NDC’s fees for the service were among the lowest in Devon.

RESOLVED that the decisions and recommendations of the Strategy and Resources Committee be endorsed.

Report by the Chief Financial Officer to Strategy and Resources on 1^st February 2021 (attached), and

(a)  the Minute Extract of Strategy and Resources on 1^st February 2021 (to follow).

The Committee considered a report by the Head of Resources (circulated previously) regarding the Revenue Budget 2021/22, Capital Programme and Medium Term Financial Strategy 2021-2025.

The Head of Resources highlighted the following:

·       Government settlement December 2020.  The provisional 2021-22 settlement of £3.3m was the same level as 2020-21.  The Fair Funding Review had been delayed by a further year until April 2022.  The New Homes Bonus in-year allocation had been allocated for 2021/22 only.  There were no legacy payments on the 2021/22 allocation and the Government was intending to consult on future of the housing incentive during 2021/22.  The Rural Services Delivery Grant matched the 2020/21 level. 

·       Council Tax levels for District Councils could be increased by up to 2% or £5 whichever was higher.  The referendum in relation to Council Tax levels for Town and Parish Councils had been deferred. 

·       The Council would receive a lower tier services grant and Covid 19 support grant as one off payments. 

·       The Council would receive 75% reimbursement on sales, fees and charges losses for the period April to June 2021.

·       Core Spending Power for England.  This had increased by 4.5% overall; however 87% of this increase came from Council Tax compared to 56% in 2020/21.

·       Urban/rural funding differences.  Analysis by the Rural Services Network indicated that local authorities serving predominately urban areas receive “higher” level of central funding compared to those in rural areas: paying over £96 per head more in Council Tax (in rural Devon £138 per head more); receive £107 (61%) per head less from Settlement Funding Assessment (rural Devon, £120 less); receive £28 per head of Social Care Grant, compared to £32 per head in urban areas (rural Devon, £28); and receive over £112 (42%) per head less in Government Funding Spending Power, excluding Council Tax (rural Devon, £113).

·       Outside of urban and rural differences, there were four points of common concern: concentration of cuts in public spending on local government; over reliance on Council Tax in general (assumption that areas with higher Council Tax could continue to sustain increases); time limited payments from incentive scheme as core funding (e.g. New Homes Bonus); and allocation of lower tier services grant on a one off basis.

·       The Medium Term Financial Strategy (MTFS) (2020-2024) model had been refreshed in October 2020 based upon: increased recent pay award (2.75%) continuing for medium term; borrowing costs and Capital Programme re-profiled; assumed Covid 19 impact on sales, fees and charges income continuing into 2021-22; and Government fair funding review delayed 12 months to 2022-23; collection fund deficit (Council Tax and Business Rates) spread over next 3 years.  A £2m funding gap was projected for 2021/22 in advance of the financial settlement announced on 17 December 2020.

·       New Homes Bonus provisional level of funding of £1,354,430 for 2021/22.  The level of funding 2020/21 was £1,836,820.  The Medium Term Financial Plan assumed £815,000, therefore, there was an additional £539,000 compared to the MTFS.  The forecast level for 2022-23 for the projected New Homes  ...  view the full minutes text for item 87.

Report by the Chief Financial Officer to Strategy and Resources on 1^st February 2021 (attached), and

(a)  the Minute Extract of Strategy and Resources on 1^st February 2021 (to follow).

The Committee considered a report by the Chief Financial Officer (circulated previously) regarding the Treasury Management Strategy Statement for 2021/22.

The Head of Resources highlighted the following:

·       Section 5.1 capital expenditure – the table detailed approved capital spend as per the previous report on the budget and capital programme, how this was financed in the lower table and therefore the ‘net financing need for each year’.

·       The Council’s borrowing need (CFR) was outlined in the table on page 142.  The increase to £17m from £6m (movement of £11m) took into account the borrowing for the new construction of the Leisure Centre.

·       The Minimum Revenue Provision (MRP) set out the repayment of debt on both internal and external borrowing from revenue budget.  The Medium Term Financial Strategy showed the impact of borrowing costs on the revenue budget.

·       Paragraph 5.3 – the table showed the level of core funds and cash available for external investments, together with the Council’s under borrowed position which enables the Council to internally borrow for the purposes of capital funding.

·       There was a high level of external investment of spare cash in 2020-21 due to cash flow of additional government monies for business grants, up-front payment of grants to the Council and covid-19 grants provided to the Council.

·       The current borrowing position was detailed in section 6.1.  External borrowing this current year was only £500,000 at present.  Net investments were higher this year due to all the grants cash that the Council were investing short term to gain minimal return until spent out.

·       The level of borrowing would increase in 2021-22 as detailed in the table on page 146.  Additional borrowing £14m would be required during the year to cover the treasury need for increased Capital Financing Requirement which was in line with the Council’s financial plans.  Under borrowing was funded from internal borrowing from cash reserves.  The Council complied with this prudential indicator in the current financial year and it was not envisaged there would be difficulties for the future.

·       The Operational Boundary (limit beyond which external debt was not expected to exceed) was set at £16million for 2021-22 to 2023-24 year.

·       The Authorised limit (control on maximum level of borrowing) maintained at £22million was in line with the level set last year.

·       The Council had adopted a prudent approach to managing risk and defined its risk appetite in section 7, in terms of creditworthy counterparties, lending limits, credit ratings of which the criteria was largely unchanged from last year. 

RESOLVED that the decisions and recommendations of the Strategy and Resources Committee be endorsed.

Report by the Chief Financial Officer to Strategy and Resources on 1^st February 2021 (attached), and

(a)  the Minute Extract of Strategy and Resources on 1^st February 2021 (to follow).

The Committee considered a report by the Chief Financial Officer (circulated previously) regarding the 10 Year Capital Strategy for 2021 to 2031.

The Head of Resources highlighted the following:

·       The Capital Strategy was reviewed annually by Full Council prior to each financial year.  The Strategy set out the ‘governance arrangements’ for capital projects coming forwards as detailed in section 4.3.

·       All capital projects required a business case, reviewing options, risks and associated costs.  Project Appraisal Group (PAG) comprised of the; Chief Executive, Business Information Systems Manager, Head of Resources and Accountancy Manager who would then meet to score the proposed project.

·       In addition to the original approval of the project, a separate approval would also be sought from the Committee and then Full Council to release the capital funds.

·       Medium Term (2021-2025) as set out in the table in paragraph 4.4 set out the impact of capital financing need, impact this had on the annual borrowing cost and then the overall Medium Term Financial Strategy budget gap, including the additional borrowing.

·       For 2022/23 current projections showed a medium term financial strategy budget gap of £2.3m increasing to £2.9m in 2024/25.

·       The estimated Capital Financing Requirement (CFR) for March 2021 was £5.76m which increased to its peak in March 2025 at £18.79m. This substantial increase in CFR reflected the £38m capital programme over the medium term including the new Leisure Centre.

·       The Council would receive an annual management fee in relation to the running of the new Leisure Centre to help offset an element of the borrowing costs.  

In response to questions from the Committee, the Head of Resources confirmed that:

·       Members were not involved in the procurement process but would be involved in considering the projects when the business cases were presented via the Strategy and Resources committee and then Full Council.  The tender process was covered by specific governance arrangements.  The procurement requirement for projects/purchases, as set out depending on financial cost, is covered on the table in section 4.3 of the report.

·       The borrowing rates as used for the forecasts within the report are those from the Public Works Loans Board. The rates are set at the time that the loan is taken out, as with personal loans, the rate is dependent on the amount borrowed and the duration of the loan. Currently a rate of 1.7% was available if the loan was over 50 years.  The budget had been modelled on the Leisure project using a rate of 3% as the rates were previously higher.  As the rates were now cheaper it was prudent to take on the borrowing for the leisure centre.

·       Longer Term (2025-2031) as set in the table in paragraph 4.5.  The Council had identified two main areas of capital expenditure within the long term forecast which are necessary to maintain business as normal i.e. the vehicle replacement programme and the on-going maintenance of the ICT infrastructure.  Leased vehicles were being considered for the Waste and Recycling service, rather than outright purchases.  ...  view the full minutes text for item 89.